Embraer Poised to Seek Approval for New Regional Jet Due in 2018

Embraer SA (EMBR3) is preparing to request formal board approval for a re-engined regional jet to update its E-Jet family of planes.

“We are going for a full board decision soon,” Paulo Cesar de Souza e Silva, Embraer’s president for commercial airplanes, said in an interview today. The first plane to be developed under the G2 codename would enter into service in 2018, he said at the IATA annual general meeting in Cape Town.

Embraer has already named United Technologies Corp. (UTX)’s Pratt & Whitney as engine provider to help it lower fuel costs and keep pace with improvements that Airbus SAS and Boeing Co. (BA) are introducing on larger single-aisle planes. The No. 4 aircraft maker has said the new model may seat about 132, more than the 120 that its largest model currently accommodates.

“We are seeing strong demand for the E-Jets and also the G2,” Silva said. He would not reveal whether a first order may come at the Paris Air Show starting on June 17, where aircraft makers typically secure billions of dollars in deals.

Embraer has already booked a series of orders this year for its current model. United Airlines (UAL) partner Skywest Inc. agreed to buy 40 more 76-seat E-175 jets last month after the Sao Jose dos Compos, Brazil-based planemaker secured 30 sales to United in April. American Airlines Inc. and its regional partner Republic Airways Holdings Inc. (RJET) agreed to order of 47 Embraer E-175 jets earlier this year.

“There are still more orders to come,” Silva said. Sales have been spurred by the introduction from next year of an improved version of the E-Jets that will lift fuel efficiency by about 5 percent, he said.

Larger E-Jets are also drawing interest, Silva said, with certification of the type in Russia opening the prospect of the first sales into that market. Carriers in Latin America, China, and the Middle East also are showing interest, he said.

The activity has started to fill Embraer’s order book after several years of muted sales. The E-175 is sold out for two years, Silva said, with the larger first E-190 and E-195 model not available until late next year.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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